🏦 Costco Union Pension: A Powerful Retirement Benefit

Unionized Costco employees receive a defined‑benefit pension, with new money contributed by Costco per hour worked—separate from your 401(k). It is a guaranteed monthly payment for life once you're eligible to retire.

Here’s how it works:

💵 Employer Contribution

Costco contributes $2.56 per hour worked directly into a pension trust (not deferred pay). That adds up to approximately $5,324.80 per year for full-time employees. This amount has been increased throughout the contract negotiation cycles. So it is reasonable to believe that these contributions will only increase over time.

You still participate in the 401(k), but you can reduce (or turn off) your deferral and take more cash now—while still building towards both retirement accounts.

👵 Eligibility & Vesting: When the Pension Becomes Yours

According company-wide union plans:

• Vesting occurs after 5 years of service

• Exemptions may be made for those over 52 years of age, allowing for immediate vesting.

• Benefits pay out based on years of service, with a bonus tier at 20 years.

• Early retirement: Allowed at age 50+, or at age 55 with at least 25 years of Benefit Service. Under the PEER system, early retirement may allow a full benefit if age + years of service meets the criteria.
  
  

• Disability pension: Offers you financial protection in case of disability. Requires vesting, plus proof of Social Security disability or medical documentation.

• Child survivor benefit: extended in July 2024 to cover children up to age 22. Leave your children financial safety and security.

🧾 Why It Matters

• Predictable, stable income in retirement (not tied to markets) that lasts a lifetime.
  
  

• Backfilled contributions from Costco, on top of your 401(k)
  
  

• Full legal ownership after vesting is complete
  
  

Vesting ensures that once you have given five solid years to your future and the company, those years count—your pension is protected even if you move on.

📞 Contact Information

• Pension plan office (Western Conference): 1‑800‑531‑1489
  
  

• Local 492 union hall: (505) 344‑1925
  
  

• Both can provide personalized benefit estimates, vesting statements, forms, and application procedures.
  
  

✅ Quick Summary

Hourly Employer Contribution

$2.56/hour → ~$5,324.80/year

Vesting Schedule

0% → 100% over first 5 years

Retirement Payout

Calculated at a tiered benefit rate, depending on contributions and length of service.

Combined Savings

Pension + 401(k) options available

Flexibility

Reduce 401(k) deferral, take more cash now